Is e-commerce happening in India? [Perspective]
[Guest article by Srini Battula, CoFounder of PlayGroundOnline, an ecommerce startup in sports category. Srini shares his experience of running PGO. ]
With MakeMytrip’s IPO success recently, suddenly there seems to be lot of momentum and interest from everyone (including VCs) in this area. I never had any doubts whether e-commerce will happen in India or not, it is only a matter of time. This could well be that inflexion point everyone is waiting for. With that said, the next question is what are the categories best suited for e-commerce. It is anybody’s guess to say books, music, and videos followed by electronics. Following that will be apparel, footwear, sports goods, fashion, accessories like bags, glasses, watches etc.
Having experience in running India’s largest online sports store (Playgroundonline.com) for the last 1+ year, we feel there is a big opportunity out there for few players to grab it before it is too late.
For these other categories, each one comes with its own challenges. Slowly I see companies getting innovative with the help of technology to address some of these challenges. US-based Zappos is a good example for footwear category. In Indian context, one common factor that runs across any category is the “tier-2 story” for the lack of accessibility on some of these products (traditional organized retail store expansion could take some more time in Tier-2 cities).
Limited access to branded products, convenience, price point in some cases, access to right product information, easy comparison of products etc. will help in overcoming the touch and feel factor. Did you ever imagine a customer ordering a complete golf set worth Rs 90,000+/- online? Would you put your bets on someone ordering a Rs. 10,000/- tennis racquet without touching it? Someone buying expensive branded shoe without strutting about in a store atleast 10 times to feel the fit and comfort? Or an English willow cricket bat worth Rs 5,000+ without feeling it? Well, these things are happening and happening frequently in e-commerce and we have many more such stories to tell.
Having said that, there are quite a few challenges that are yet to be addressed. Things that come to my mind immediately are logistics and product delivery delays, payment gateways costs, and the vendor readiness for systems integration etc. Entire eco-system for e-commerce needs to mature to deliver the level of customer service that is required to influence the purchasing behavior of the consumers.
In addition to this, broadband penetration and access to computers still needs to improve in tier-2 and tier-3 cities. Roll-out of 3G services could give that leap for e-commerce in India.
It is no secret that e-commerce model is capital intensive and the gestation period for e-commerce company to gain economies of scale could be little longer. I strongly feel that availability of capital plays a very important role in building the technology, customer service, product inventory and robust back end infrastructure.
So, what does this all mean? E-commerce is here to stay and it could only grow further. If Indian GDP were to grow at high single digit percentage, we could make a safe assumption that e-commerce could only grow, pace of the growth could be dependent on some systemic improvements discussed above.
What’s your opinion?
Recommended Read: An insightful coverage of ecommerce in india
[Note: If you an entrepreneur running ecommerce portal and would like to share your experience, please get in touch with us.]